January 2025: Vision 2030 - Where Will The Returns Come From?

2025 - A Year To Be In Crypto

The crypto industry has demonstrated significant progress in rebuilding trust, fostering innovation, and maturing as a financial and technological ecosystem. In 2025, we anticipate substantial industry acceleration driven by multiple positive factors.

Crypto-friendly regulatory policy. 2024 was a pivotal year for the evolution of crypto policy, with many significant developments in crypto regulation across the globe, including the EU's Markets in Crypto-Assets Regulation (MiCA) becoming the first comprehensive crypto regulatory framework. The US election has changed the paradigm of the crypto industry. When you think about why prospective investors were saying no, the answer was often a lack of regulatory clarity. The new Trump Administration's friendlier approach to crypto suggests a more balanced and supportive regulatory landscape for cryptocurrencies in the United States in 2025.

Launch of ETFs and institutional momentum. The approval of the BTC and ETH spot ETFs has legitimized the asset class and made it more accessible to both retail and institutional allocators. IBIT was the first ETF to reach $3B in AUM in the first 30 days of launch and $40B within ~200 days; these were both tremendous records in legacy markets. ETFs issued by incumbent financial institutions, including Blackrock, Fidelity, VanEck, Franklin Templeton, and others, demonstrate the demand for exposure to the cryptocurrency asset class from some of the most respectable institutional investors. Bitcoin ETFs will continue to grow distribution, and there may be more ETFs to follow (e.g., Solana).

F500 companies use blockchain technology in the ordinary course of business. Stablecoins surged in popularity across the FinTech ecosystem and became a back-end infrastructure for peer-to-peer transactions, remittances, and small business operations due to their affordability and accessibility. JP Morgan uses stablecoins to settle $2B in daily transaction volume, and Stripe recently made a $1.1B acquisition of Bridge, a stablecoin infrastructure company. Other notable examples include PayPal’s stablecoin PYUSD, Visa’s new tokenization platform, Robinhood launching crypto transfers in Europe, and Revolut’s planned MiCA-compliant stablecoin.

Web2 has continued integrating blockchain to enhance supply chain transparency, streamline payments, and improve data security. Recent examples include Deutsche Telekom, Telefonica, Walmart, IBM, Microsoft, and Amazon. American Express, Warner Music, and Cartier use blockchain technology to increase user engagement and customer loyalty. Improvements in blockchain technology have resulted in lower costs, faster transaction times, and a simplified user experience when interacting with the blockchain.

Tokenization of real-world assets (RWA) gains momentum. Tokenized RWAs moved from pilot to at-scale deployment, reaching over $15B in total value, while tokenized US Treasuries surpassed $4B by the end of 2024. BlackRock, UBS, Guggenheim, and Brevan Howard have joined KKR, Hamilton Lane, and Franklin Templeton in tokenizing RWAs this year. In addition, over $200B of USD-backed stablecoins facilitate the movement of value globally. The institutional-grade infrastructure is here to support the institutional adoption of digital assets.

Japan has become a global leader in tokenizing real estate, with a remarkable growth in issuances over the last three years. In the first quarter of 2024 alone, over JPY 100Bn of tokenized real estate was issued. Leading financial institutions such as Nomura, Daiwa, SBI, and SMBC, among others, are already heavily involved in the space.

Mainstream adoption - new use cases are emerging: Polymarket, Telegram, and DePINs. Polymarket has become the world’s largest prediction market and a breakthrough crypto use case. Its rapid growth (1M+ new accounts and $7.5B+ trading volume), highlights its successful progress toward product-market fit. The Polymarket mobile app became the second most downloaded iOS news app leading up to the election, outperforming legacy media. Other breakthroughs of the year included the explosive growth of Telegram’s TON ecosystem and the remarkable real-world traction of DePIN (decentralized physical infrastructure) projects.

10SQ Portfolio Highlights In 2024

In 2024, Telegram reached profitability, with total revenue surpassed $1B in 2024 and over $500M in cash reserves (excluding crypto assets). The launch of TON blockchain has significantly contributed to this remarkable achievement. The success of Telegram Mini Apps has expanded the platform's user base and created new opportunities for monetization of increased user engagement. Achieving profitability has been a goal for Telegram in preparation for a planned IPO by 2026.

We invested in TON because we believe that the company has the potential to become one of the largest crypto ecosystems by leveraging Telegram’s vibrant community of 950 million monthly active and 12 million paid users.

Telegram's TON blockchain demonstrates another global adoption case with viral tap-to-earn minigames, which keep users tapping their phones to mine token allocations. Notcoin, the first major success, gained over 40 million users and became one of crypto's most widely held tokens with 2.5 million holders and a ~$1B valuation. Hamster Kombat, one of crypto's biggest marketing phenomena, has attracted 200 million users and 35 million YouTube subscribers.

Talos is No.1 enterprise-grade end-to-end crypto trading infrastructure provider with deep roots in traditional markets and is best-positioned to benefit from institutional adoption of crypto. Total volume since inception surpassed $350B in 2024.

In 2024, Talos solidified its dominant position as the leading crypto trading technology provider, broadened its risk management and DeFi services by acquiring Cloudwall and Skolem, and expanded in Europe by opening a new entity in the Netherlands. The company has the largest number of top-tier partnerships and integrations (80+ in 2024) and continues to be the top choice for sophisticated institutional clients.

This year, Talos was recognized with multiple awards, including Best Trading Platform (Hedgeweek), Best Execution Provider (Digital Banker), and Best Blockchain Tech Service Provider (FX Markets Asia).

10SQ invested in Figment and Blockdaemon because they are the two leading blockchain staking infrastructure providers. The companies’ infrastructure underpins the security and transaction processing capabilities of the largest blockchain networks including Ethereum and Solana. Both companies earn revenue based on the value of assets staked with the company and benefit directly from the growth of the cryptocurrency space.

As the market cap. of all cryptocurrencies reached new all-time highs in late 2024, the assets under staked for both companies correspondingly increased. This industry wide tailwind as demonstrated by the 46% increase in ETH and 87% increase in SOL in 2024 will result in significant year-over-year rev. growth.

One aspect to look forward to in 2025 is with easing cryptocurrency regulations. The ETF issuers could be allowed to stake the assets held within the ETF to generate an yield for their investors. Figment and Blockdaemon as the largest brands in the space should receive the majority of assets in such a scenario leading to revenue growth.

10SQ invested in Superlogic, a loyalty software platform powered by blockchain technology, because the company demonstrated the ability to create superior loyalty solution that integrated seamlessly with a corporation’s existing IT stack. Superlogic’s management also had experience working with F500 corporations and have American Express and Warner Music corporate investors and customers.

In 2024, Superlogic continued to expand its customer pipeline of large corporate clients across the financial services and entertainment space. We believe that Superlogic will eventually allow millions of people to interact with blockchain without requiring blockchain knowledge.

Going into 2025, Superlogic is finalizing a new fundraising round at a higher valuation than where 10SQ invested.

Key Themes In December

10SQ Vision 2030 - Where Will The Returns Come From?

Inevitable

1. A dozen crypto companies go public: These venture exits will drive renewed investment and a wave of M&A as winners compete for the best assets with new currency. In 2025-2026, multiple IPOs are on deck for the crypto space, and SPACs will make a comeback.

2. Crypto giants flooded with cash: Investments in TradFi, crypto companies, and venture-like capital flowing into early-stage rounds, M&A, and war for talent. It’s a global game.

3. Trading volumes explode: Driving companies that are trading technology enablers, middleware, liquidity providers, and intermediaries toward new highs. Spot, derivative, meme, NFT, predictions, RWA - everything trades.

4. Financial productization: Distributed Finance 2.0 productizes yield. Traditional finance firms will take a piece as well with new products. Many follow Blackrock. Large institutions buy bonds, reach for yield, and hold synthetic crypto exposure - billion-dollar inflows.

5. Scaled gaming: Several massive multiplayer games with over 5M users will deploy blockchain-based solutions and economics. Billions get new crypto wallets. SONY leads.

Highly Likely

6. Stablecoins are the default rails: They take over payment rails as major fintech players like PayPal finally see a path to disintermediating the VISA/MasterCard monopolies and traditional banks.

7. Prediction markets everything: A global capitalist market of opinions and options becomes normal. You can bet on anything, anytime, anywhere.

8. Crypto legislation enshrines clarity: New rules. Focused regulatory enforcement, CFTC takes charge. Global cohesion. Friendly bank regulations. Sovereign bitcoin reserves.

9. Physical world of token Incentives: DePIN becomes normalized. Mesh networks, edge computing and storage, EVs, solar, ridesharing - lower coast, greater access, alignment.

10. Global gains: China (and others) further ease domestic crypto policy to a more accommodative stance to avoid being left behind. Digital asset reserves and corporate treasuries force rulemaking.

Probable and Possible

11. AIs are crypto: Authenticity, data markets, push for distributed training, compute and model sharing networks, and agent-to-agent payments are prolific use cases.

12. "Phygitals" are everywhere: Physical products linked to NFTs become common marketing practices standard and user engagement tools among consumer brands.

13. Big databases: First the DMV, then land registries, then corporate assets, then health records, government contracts, FOIAs, public data… all on-chain.

14. Digital identity: People control their digital identities, stored securely on decentralized networks —proof of age, citizenship status, or membership—without exposing sensitive details. A “reputation score” is maintained on-chain, based on verified interactions and achievements.

15. Creator economies: Musicians, artists, and influencers have their own social tokens—giving fans a stake in their creative journey combined with instant royalties & revenue sharing.